Posted
by
samzenpus
on Thursday December 07, 2006 @11:45AM
from the music-wants-to-be-free dept.

trifster writes "Ars Technica has an article about EMI selling DRM-free MP3's through Yahoo Music's US online store. It should be noted that this trial is an attempt to increase sales and competition with online music that is not necessarilary available on iTunes."
From the article:
"Why the sudden interest in non-DRMed formats? It appears that the record labels are slowly beginning to realize that they can't have DRMed music and complete control over the online music market at the same time....
There are signs that consumers might be growing irritated by the Balkanization of the online music scene. Nielsen SoundScan reports that online music sales dropped during the second and third quarters of the year."

"Selling a couple xian tunes w/o drm isn't going to exactly cause a wave of common sense to break out. Does anyone actually listen to this crap?"

Norah Jones has had a couple of multi-platinum albums in the past five years. She's a bona fide star. Relient K are one of those "crossover" Christian bands that have managed to release three consecutive gold albums. By the way, I found this data with about two minutes of Googling.

Per Ars Technica, these artists were picked because their audience skews older. P2P usage skews younger. The Slashdot demographic is also younger, so most people reading this see the world as one where everybody uses P2P to get their music and nobody listens to lame artists like Norah Jones, but EMI is apparently looking at the big picture.

Does anyone know if Christian music lovers are in the demographic of illegal file downloaders?Christians are supposed to be honest and pay for stuff anyway, right? Just how big a risk is this little online venture?

If these files start showing up on P2P lists, what does that say about us all?

This one will bite the dust as soon as the other cartel members get wind of it.

This is the same cartel convicted of fixing the price of CD's. This is the same cartel has the ability to maintain an artificially high $10-$18 per new CD. Look at the demise of allofmp3.com. http://en.wikipedia.org/wiki/AllOfMP3.com_legality [wikipedia.org]

The money to be made by eliminating your right to first sale is too powerful.

Pricing drives shoplifting, auto theft, and lots of other crimes. Businesses can take this into account, but no matter what industry you're in, there's always going to be a certain percentage of people who will try to help themselves to your product for free and use pricing as a rationalization.

"People will always have an incentive to crack DRM if they can't get the music for a fair price legally."

Agreed, but for many people, "fair price" has been sliding downward so that it's below whatever price the industry sets. Remember six years ago when CDs were $20 and online tracks were $3 and hard to come by? People justified P2P usage back then because CDs were so expensive and legit online tracks were expensive and offered little selection. Today, new CD releases are south of $15 and selection of online music is plentiful at $0.99 and below. Yet this price is still not "fair." For many people, it never will be. Those people likely aren't high on the record companies' target audience... unless you're counting lawsuits.

"I imagine the music industry is scared to death of sliding music prices, even though that's where it's going to head eventually. There is some point between "overpriced" and "free" at which both consumers and most artists will be happy."

...and the industry has found that at $0.99. The iTMS has been an overwhelming success, despite the fact that everybody on Slashdot hates it because the pricing isn't "fair" and because the product is DRM-laden.

You are not going to believe this, but if online music pricing dropped to $0.80, $0.70, or even $0.50, I would not buy more. I buy all the music I want online, and $0.99 is not a burden to me. It's conceivable that I'm the only consumer on the planet for whom there's no elasticity between $0.99 and $0.50, but that's highly unlikely. Pricing theory is all about finding that point on the curve that makes the most profit, even if it means that you're limiting your potential customer base.

"Those artists who expect to become millionaires from a popular record (and who don't tour), are going to be sorely disappointed. Those artists who are happy making a decent living, and who actually produce good music, will prosper."

This sounds a lot like many arguments I hear for lower music prices which end with some form of "artists will just need to accept their new place in society." Why should they want to do that? Many people would trade fame for money, but many would not. If I offered to make you more well-known but your salary would have to drop by $20K a year, would you do it? Do you think everybody would take me up on my offer?

As much as I hate the RIAA (and the tracks in question), I'll be buying these tracks and encouraging everyone I know to buy them as well! I'll probably even send an e-mail to Yahoo customer service and to the label as well thanking them. The bottom line is that we need to reward those labels that will release DRM free music to try and send them the message that we want DRM free music. Vote with your dollars on this one. If there is success here they might try it with other tracks.

The MP3 debate is near and dear to my heart and I've given it a lot of thought. So here is my 25 cents (inflation):

CD prices are not, as such, artificially inflated to an outrageous degree. However, they are IMO spending their money inefficiently.

A LOT of the money they collect for a CD has already been spent in marketing.

If we're going to point our fingers at them and say that they're bad people, we should do it because they're ramming (successfully) horrid music down people's throats.

If you listen to the music put out these days, you'd find that almost all of the songs from a given artist sound exactly alike. *cough* metalliwhiner *cough* or any of the other popular bands.

The reasoning behind this is simple: when mary-muffins goes to buy the latest CD, she is less than happy if all the music doesn't sound as good as the 1 or 2 tracks splattered across pay-for-playdio. (I don't like getting a CD for a single song and have the rest of the CD suck either.)

Mary-muffins would know good music if it hit her in the face, she is just never allowed to hear it. The current RIAA members are the gatekeepers. Remember (anyone?) mp3.com? I do.

I found over a dozen bands that never appear on the splaterworks. Small, little bands with unique sounds and really interesting songs.

CNET bought them and for some odd reason, destroyed the entire music catalog and the service. It no longer exists.

Song (as well as movie) piracy exists for a single reason, and it has little to do with money above a certain age: ease.

If I can download a song or 6, in mp3 or better, at an acceptable bitrate in which I can hear the songs before hand (lower bit rate is acceptable for that of course), and if it is as easy as getting songs from bittorrent or whatever (click and go), then I'd buy.

Otherwise, if I can get superior service, packaging, delivery, and ease of use for free... why wouldn't I?

(Spare me the legal or moral argument. I consider the RIAA to be far more reprehensible than someone infringing on their copyrights. I consider them to have sleazed their way into many of the copyrights they own in the first place. I cite http://www.jdray.com/Daviews/courtney.html/ [jdray.com] as Courtney Love's take on the music industry and http://negativland.com/albini.html/ [negativland.com] as Steve Albini (producer of Nirvana's "In Utero".)

Knowing that the music industry spends a LOT of money on promotion, and that live events and selling goodies (like t-shirts and whatnot) make the bands more money and promote at the same time (assuming people want to see them, unlike the ditzy shizz (those idiotic morons that maligned their country and alienated their entire clientele then wondered what the hell happened)), the music industry simply needs to change tactics.

They would earn (tons) of money, get to keep themselves as the gatekeepers, and take less risk in promotion if they followed this plan:

create a small cafeteria plan of offerings ($x for y songs per month, $x per song, and so forth). Create a merchandising link to sell the band's material goodies as well.

create a system for preview, band info, perhaps even music videos (streaming, if not download) to promote some hype.

DO NOT promote the artists via the normal very expensive channels. Do not pay radio stations to play the artists. Do not spend loads of cash to merchandise them.

As an effect of 4, the _patrons_ would then decide to which music to listen. Word of mouth, especially among the teen to college crowd, is the most effective advertising vehicle. You can't buy advertising as good as word of mouth.

Use intelligent linking with the bands. "You like x band? You'd probably like y band too. Click here to see."

I thought the main problem with allofmp3 was that they didn't have permission to sell what they were selling

No, that is the RIAA public relations and political lobbying lies. Their primary tactic is chant "priate" endlessly until they get what they want.

Russian law operates on the exact same legal principals as US law on all relevant issues here.

Pandora.com (an American company) operates in full compliance with US copyright law, under a statutory license.AllOfMP3.com (a Russian company) operates in full compliance with Rusian copyright law, under a statutory license.

A statuory licence means that the activity is legal, even if the copyright holder wants to forbid it. The RIAA's ranting that there is somethign wrong with AllOfMP3.com or Russian because the RIAA has not granted permission is bogus. Statutory licenses are legitimate in US law and the law of just about every other country on earth. The RIAA has no more right to compain about than, than a Russian artist has a right to complain about their music being sent by Pandora.com under the almost identical US statuory license.

(Note: You can find Pandora's MP3 file downloads in you temp folder named Access-## with no file extenstion, just rename the file to SongName.MP3)

Pandora.com is required to pay a royalty for each song they send to each person.AllOfMP3.com is required to pay a royalty for each song they send to each person.

Pandora.com pays those roalty to the US collection organisation (CARP), which then distributes those royalty payments to the copyright holders.AllOfMP3.com pays those roalty to the Russian collection organisation (ROMS), which then distributes those royalty payments to the copyright holders.

For the indentical MP3 file download, Russian law requires AllOfMP3.com to pay a royalty rate about 20 times higher than the royalty rate set by US law.

Why is the RIAA so pissed? Well two reasons. For one thing they are having a shit-fit that AllOfMP3.com is sending DRM-free music. (US CARP law allows DRM free music as well, and they are desperately trying to get that law "fixed" as well.) The other reason the RIAA is pissed is that AllOfMP3.com more directly undermines their absolute control and massive rates of online stores held under the RIAA's thumb. US law imposes some arbitrary restrictions on companies like Pandora.com to try to force it to resemble old radio. US law has weird terms such as Pandora.com cannot send you more than three songs by the same artist in any single hour. The primary limitation is that Pandora.com cannot send you a specific song that you requested within an hour of you making that request.

So US law and Russian law are almost identical, and US law and Russian and operate under the exact same legal principals, the only differense being that US law has narrower allowances for the copyright-activity and sets a lower royalty rate, and Russian law has slightly more flexible llowances for the copyright-activity and sets a twenty times higher royalty rate.

And then the really fun part is that the RIAA bitches that their artists are not getting paid for the AllOfMP3.com music. And you know WHY RIAA artists aren't getting paid? Because the RIAA contracts with their artists turn over ownership of the copyright to the RIAA members and forbids the artists to go and directly collect their payments themselves. The RIAA is the only one legally allowed to go get these payments, take their share, and distribute them to the artists. And guess what? The dickwads at the RIAA REFUSE to take the money. The RIAA REFUSES to take the money and pass it along to the artists. And as I mentioned, the RIAA contract prohibts artists from going to get their money themse